Market breadth is undergoing a regime change (bearish)

TopdownCharts
01-13

Learnings and conclusions from this week’s charts:

  1. Market breadth is undergoing a regime change (bearish).

  2. Election cycle seasonality is ranging and volatile in Q1.

  3. Retail speculators just went all-in on stocks.

  4. The US index is becoming more concentrated (just like RoW).

  5. Margin expansion has been more a feat of financial vs tech innovation.

Overall, as noted there appears to be a bearish regime change underway in the US stockmarket. This comes after an extended strong bull-run, and amidst numerous late-cycle signals showing up. This week we explore these changes and a few other key issues around market structure and fundamentals.

As we head towards political regime change, it seems the market is also in the process of undergoing a regime change. S&P500 $.SPX(.SPX)$ 200-day moving average breadth (proportion of stocks trending up) has broken down out of the robust range it occupied most of last year.

Meanwhile the index itself has started to record a series of short-term lower lows and lower highs. This is what you would call a health scare (something serious and relatively sudden that prompts you to rethink things).

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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